1. (C) SUMMARY: On September 17, NEA Principal Deputy
Assistant Secretary for NEA Jeffrey Feltman chaired an
Embassy Tel Aviv-Washington interagency delegation
participating in the first joint U.S./Israeli dialogue on
Lebanon at the Ministry of Foreign Affairs (MFA) in
Jerusalem. Overall, the Israelis, while displaying a
sophisticated analysis of Lebanon and Hizballah, maintained a
focus on near-term security threats at the expense of a
long-term plan to neutralize Hizballah, stabilize Lebanon,
and prevent further conflict. Both sides agreed that
Hizballah has made political gains and has continued to rearm
since the passage of UNSCR 1701 in August 2006, and that it
is critical to support and strengthen the moderates in
Lebanon, led by March 14. Contrary to U.S. analysis, the GOI
perceived the Doha Agreement and subsequent Lebanese cabinet
statement as significant setbacks for moderates in Lebanon.
The Israelis were skeptical that Hizballah could be
constrained via internal Lebanese politics. Israel
encouraged direct USG support for March 14 over GOL
institutions, fearing Hizballah could come to control the
latter. On UNSCR 1701, the Israeli delegation said that
issues like Ghajar, the Sheba'a farms, and overflights were
peripheral and should only be addressed within a broader
context that emphasized ending arms transfers from Syria to
Lebanon, strengthening UNIFIL, and disarming Hizballah.
Feltman urged a focus on both ending arms transfer and
preventing Hizballah from using the arsenal it already has.
On Ghajar, he noted that a resolution would not be a victory
for Hizballah, but would remove a card already in its hand
that could be used as an excuse to resume hostilities with
Israel. The IDF and MFA were uncomfortable with what they
described as UNIFIL's "trust us" approach on Ghajar, but were
intrigued by Feltman's question as to whether supplemental
U.S. assurances might help bridge some gaps. END SUMMARY.

--------------------------------------------
GOI: March 14 in Lebanon heroic, but failing
--------------------------------------------

2. (C) Nimrod Barkan, Director of the MFA Center for
Political Research (INR A/S equivalent) laid out Israel's
analysis of the current situation in Lebanon, beginning with
the premise that "the situation in Lebanon is not a result of
what Israel does or does not do." Barkan said the GOI
foresees a Shia demographic majority in Lebanon within ten
years, and believes the "March 14 moment" to be temporary.
"We foresee a March 8-Hizballah majority after the 2009
elections." Nonetheless, the United States and Israel should
work to support moderates and to capitalize on Hizballah's
Lebanese identity to restrain its influence and autonomy,
including its ability to unilaterally initiate hostilities
with Israel. Barkan said the GOI had interpreted the Doha
Agreement and the August 2008 cabinet statement as victories
for Hizballah that further legitimized its "resistance" credo
and strengthened its influence over the Lebanese government,
commenting that March 14 should have compromised before the
May 2008 violence when it was stronger relative to Hizballah.
March 14 is "courageous" but neutered. "Their participation
in the welcoming ceremonies for Samir Quntar was their final
acquiescence." Additionally, while March 8 is succeeding in
peeling away March 14 members like Walid Jumblatt
domestically, Hizballah is also gaining regional acceptance.
"They were invited to Cairo, they are talking with the
Jordanians." Additionally, Barkan expressed concern that the
August 2008 Lebanese cabinet statement seemed to authorize
the downing of an Israeli plane overflying Lebanon, which
would likely draw an Israeli military response. "If a pilot
is lost, all hell will break loose." However, Barkan praised
President Michel Sleiman, saying "he's not Lahoud, he's not a
Syrian puppet, and he's not working under Hizballah diktat."

3. (C) Barkan admitted that Israel's bellicose rhetoric

threatening to hold the Lebanese state responsible for
Hizballah's actions was aimed at deterring Hizballah
aggression. He understood the U.S. perspective on the need
to distinguish between the state and Hizballah in any future
conflict, but Barkan's view may not reflect policy makers'
views. Feltman emphasized the need to strengthen Lebanese
security services as counterweights and alternatives to
Hizballah, especially to counter Michel Aoun's argument that
Lebanon's Christian minority should ally itself with the Shia
minority for protection in a "Sunni sea." Barkan disagreed,
arguing that support for the LAF was meaningless, as the LAF
would never confront Hizballah directly and might eventually
fall under its control. Barkan suggested instead that the
Lebanese Internal Security Forces (ISF) should be
strengthened as a "Sunni militia," but seemed to contradict
himself when he said later that Saudi Arabia's policy of
arming Sunni groups in Lebanon was "bankrupt."

4. (C) PDAS Feltman shared the U.S. analysis that "we are
better off in Lebanon now than in June 2006," noting that
Hizballah is now extremely unlikely to initiate the kind of
cross-border attack that sparked the 2006 war, but
acknowledging that Hizballah would still like to hit Israel
"without crossing a red line," including via targeting
overflights or IDF troops in northern Ghajar. Feltman
pointed out that Hizballah's arms are now being discussed via
the National Dialogue, and that most Lebanese agree that an
autonomous Hizballah is a danger to Lebanon. Doha placed
further constraints on Hizballah and took political disputes
off the street and into the cabinet and parliament, where PM
Siniora and March 14 currently hold an advantage.

---------------------------------------
Hizballah strong, but can be restrained
---------------------------------------

5. (C) LTC Etay Shapira of the Israeli Defense Intelligence
(IDI) followed Barkan with an assessment of Hizballah's
military strength. Acknowledging that the IDF bases its
conclusions on "intelligence" whereas UNIFIL and the UN
demand "evidence," Shapira asserted that Hizballah has not
relinquished the south, as UNIFIL Commander Graziano asserts,
but has adapted to the presence of UNIFIL and the LAF by
maintaining a lower profile. "The LAF and UNIFIL interpret
UNSCR 1701 as meaning 'no weapons in public.'" IDI believes
that the Hizballah has 20,000 rockets south of the Litani,
but UNIFIL cannot find them without entering homes, which it
is unwilling to do without LAF consent. Shapira noted that
even if UNIFIL requested permission to enter homes, the LAF
would tip off Hizballah. Shapira also cited "very good
intelligence," but not proof, that Hizballah has built
"underground cities" inside the UNIFIL zone, including
command and control centers, barracks, and firing positions.
As Hizballah rearms, the IDI noted that Israel is less
concerned with the number of weapons and more concerned with
their increasing sophistication. The IDI assess that
Hizballah's anti-aircraft weapons can hit Israeli helicopters
or unmanned aerial vehicles (UAV's), but not yet manned
aircraft. They also believe Hizballah's medium-range
missiles are more accurate, allowing Hizballah to attack
specific targets in Tel Aviv, and that the "surprise"
promised by Nasrallah in the event of another conflict could
be a missile strike on Israel's nuclear facility at Dimona.

6. (C) Shapira acknowledged that newly-appointed LAF
Commander Jean Kahwaji was "not Hizballah's first choice,"
but that his appointment would not change the LAF's overall
posture toward Hizballah.

7. (C) Hizballah has grown in military strength, Barkan
noted, adding that Hizballah's biggest constraint is its
"Lebanese" (as opposed to "Iranian" or "Jihadi") identity,
which implies a need to maintain cross-confessional
alliances. While Jihadis in the movement continue to press

for more aggression against Israel, Hizballah leadership
wants neither civil war nor another massive Israeli attack.
Hizballah is also being reined in by Iran, which does not
want Hizballah drawn into a conflict with Israel until Iran
has achieved a nuclear weapons capability. Barkan argued
that every Israeli strike on Lebanon since Operation
Accountability in 1993 has improved security along Israel's
northern border by establishing a stronger and stronger
Israeli deterrent. Nonetheless, Barkan emphasized that
Hizballah will "never" give up its arms and wants to
"reestablish a balance of terror," including by avenging the
death of Imad Mughniya. "Their list of potential excuses
goes well beyond Sheba'a Farms and Israeli overflights."
Therefore, returning Sheba'a would merely strengthen
Hizballah, weaken Israel, and do nothing to help Lebanese
moderates.

8. (S) PDAS Feltman agreed that Hizballah's Lebanese
identity is the best way to constrain Hizballah politically
and militarily. "Hizballah has adopted the veneer of a
nationalist movement, and to maintain it they need support
beyond their Shia base." Because the Sunnis will never
support Hizballah, it relies on Michel Aoun for Christian
cover and national influence. In the 2009 parliamentary
elections, a few key Christian districts will decide the
election. Therefore, the United States wants to support
President Sleiman and the LAF to marginalize Aoun in the 2009
elections, because marginalizing Aoun would hurt Hizballah.
However, Feltman noted that "all bets are off" if Iran orders
Nasrallah to strike Israel, and that Nasrallah's threats to
target Israeli overflights should be taken seriously.
"Nasrallah tends to be very transparent."

9. (C) To maintain pressure on Hizballah, Deputy Director
General (DDG) for International Organizations (IO A/S
equivalent) Eviatar Manor recommended a renewed push by
Israel and the United States for fuller implementation of
UNSC 1701. The U.S. and Israel have a shared interest to
preserve calm in south Lebanon, improve Israel's deterrence
against Hizballah, strengthen UNIFIL, and fully implement
UNSCR 1701. Unfortunately, Manor asserted, "the UN and
Europeans have focused on peripheral issues like Ghajar,
Sheba'a, and overflights," hoping that Israeli concessions
will somehow strengthen Lebanese moderates. Instead, he
urged that attention be focused on Hizballah's rearmament and
defiance of the weapons-free zone in south Lebanon.
Relatively new to the Lebanon portfolio, Manor later
acknowledged that many of his concrete recommendations (push
the LAF to toughen up, make UNIFIL more assertive, convince
the Europeans of the Hizballah threat, do more to prevent
weapons transfers across the Syrian-Lebanese border,
including by implementing recommendations of the two reports
of the Lebanon Independent Border Assessment Team (LIBAT))
had been the focus of U.S. and Israeli efforts since 2006, to
little or no avail. Alon Barr, FM Livni's chief of staff,
suggested that UNSCR 1747's prohibitions on arms transfers by
Iran and the attendant UN sanctions committee could be
another avenue t attack the problem of Hizballah rearmament.

1. (S) Feltman disagreed with Manor's assertion tht
Ghajar, Sheba'a, and overflights were "peripheal" issues,
noting that Sheba'a has become a natonal issue, with PM
Siniora and others arguing that "resistance by diplomacy" was
a preferable meas to "liberate" Lebanese territory.
"They're chalenging Hizballah's monopoly on the meaning of
"esistance" and Hizballah's assertion that force isthe only
way to deal with Israel. The Lebanese publicly refuse to
negotiate with Israel, but in fact, they're negotiating with
Israel already over Ghajar via the LAF-UNIFIL-IDF tripartite

mechanism. We can help Siniora and his allies and undermine
Hizballah by demonstrating that diplomacy works. Ghajar is a
good place to start. This would be a victory for moderates
and a defeat for Hizballah." Feltman encouraged the GOI to
accept Lebanon's response to the UNIFIL proposal (August 22,
2008) for IDF withdrawal from northern Ghajar and asked
whether additional assurances from the USG, to supplement the
UNIFIL plan and Lebanon's written response, would help allay
Israeli concerns over UNIFIL's protection of the Syrian
Alawites who now hold Israeli citizenship in northern Ghajar
and the timing of a UNIFIL-LAF handover. Feltman also
stressed the importance of countering the narrative that was
established in Lebanon after the Israeli prisoner exchange
with Hizballah -- a deal which led many Lebanese to conclude
that Hizballah and Israel are colluding.

11. (C) LTC Vered Pollak of the IDF/J5 Middle East Division
emphasized that the main Israeli interest in northern Ghajar
is the prevention of a security vacuum in a town straddling
the Blue Line, noting it was a nexus for smuggling and at
least one attempted attack on IDF troops pre-2006. LTC
Pollak emphasized that Israel has no interest in being north
of the Blue Line if these concerns are addressed. Rather,
Israel has a strategic interest in withdrawing from all
Lebanese territory in accordance with UNSC resolutions. She
referred to UNIFIL Force Commander Graziano's proposal of
August 22, 2008 as "very thin" and said the IDF wants
specific guarantees on the security and final disposition of
the residents of northern Ghajar. She noted that the IDF
believes that the Lebanese want the opposite: a temporary
agreement to secure IDF withdrawal without references to a
more permanent solution. DDG Manor complained that, when
Israel asked for specific details pertaining to civil and
security arrangements, UNIFIL's answer was "trust us."

12. (C) Feltman also noted that some use of the concept of
armistice, but not necessarily the details of the 1949
Israel-Lebanon Armistice Agreement abrogated in 1967, could
be used to create a "positive agenda" between Israel and
Lebanon. "The Armistice still has positive connotations in
Lebanon. It is referenced in the Taif Accord and Siniora's
seven point plan. Hizballah cannot oppose it." Feltman
noted that Lebanese leaders such as Siniora have noted that
using the cover of "armistice" would allow more creative
approaches on the Lebanese side. A revived Israel-Lebanon
Mixed Armistice Commission (ILMAC) with a UN role might be a
useful cover for more meaningful Israeli-Lebanese
discussions. (NOTE: In a subsequent meeting, Barkan told
PolCouns that our armistice proposal was intriguing, but
warned that Israel has concerns about allowing the UN to take
a mediating role. END NOTE.)

13. (C) DDG Barkan concluded that Israel's sole objective in
Lebanon was to weaken Hizballah and postulated that this
exclusive focus may explain why Israeli policy does not
always track with of the U.S. desire to strengthen the
institutions of the Lebanese state. Feltman interjected that
the U.S. policy of strengthening state institutions was aimed
precisely at weakening Hizballah. LTC Pollak noted that the
IDF does not see the LAF as part of the "moderate camp" but
rather as a reflection of Lebanese society. "Weapons
provided to the LAF by the United States are more likely to
be turned on Israel than Hizballah. At a minimum, there
should be clear benchmarks for U.S. support to the LAF that
require them to better implement UNSC resolutions, including
by securing the border and going after Hizballah."

14. (C) PDAS Feltman reiterated that the U.S. and Israel
shared goals of protecting Israel while building a strong,
secure Lebanese state. "We must build a state that is an

alternative to Hizballah and shows Christians they can be
protected without pandering to Hizballah. The LAF is loved
and respected by the Lebanese public, and will gain influence
at the expense of Hizballah if it is proven capable,
credible, and backed by international support." Barkan
agreed, noting that Israel had always had more success
dealing with strong unitary actors like Egypt and Jorda --
but including Hamas in Gaza -- than weak states and non-state
actors.

--------------------------------
Taking Syria out of the Equation
--------------------------------

15. (C) The Israeli side emphasized that Syria remains an
important factor in Lebanon, but agreed that a return to
Syrian hegemony would be no panacea. Barkan dismissed as
nonsense the notion that Israel wanted to return Lebanon to
Syrian control. Feltman said he was relieved to hear that,
and asked that Israel keep U.S. interests in mind during its
talks with Syria. "Your security is a priority for us, but
we also have independent interests in Lebanon that would be
undermined by another conflict or a Syrian return." Barkan
said that while Lebanese President Michel Sleiman is "not a
Syrian puppet," he understands that Syria's enemies in
Lebanon do not live long, adding that Israel went out of its
way ("perhaps too far") to assure to Syria during the 2006
war that it would not be attacked. Feltman asked why Israel
was not holding Syria responsible for its support to
Hizballah and other violent actors in Lebanon. Barkan noted
Israel is trying to pull Syria away from Iran. "Even if
Syria does not reform its behavior after an agreement, it can
be convinced to limit support for Hizballah and stay out of
any Israeli conflict with Iran." IDF representatives viewed
Lebanon as a permanent problem, but argued that Syria can be
fixed. Barkan further noted that the subject of Syrian
weapons transfers to Hizballah had only recently been
included in Israeli proximity talks with Syria. LTC Shapira
noted that, separately, Israel had passed "strong messages"
to Syria via France and the UN Disengagement Observer Force
(UNDOF) that transfers of advanced surface-to-air missiles
and accurate long-range surface-to-surface missiles to
Hizballah would cross Israeli red lines. "But we acknowledge
that Syria might not be left out of the next war."